Source: Rabobank

LATEST Consumer Price Index data released by the Australian Bureau of Statistics today shows that red meat price rises have been a big contributor among food and beverage items to inflation.

The latest CPI data found headline inflation in Australia rose 4.6pc year‑on‑year in March, accelerating sharply from 3.7pc in February and reaching its highest annual rate since September 2023.

“Within the food basket, meat and out‑of‑home meals were the largest contributors to food price inflation in the data,” Rabo food retail analyst Michael Harvey said.

Meat prices (notably beef and lamb) continued to run at double‑digit inflation rates, hitting 11.8pc year-on-year, supported by strong local livestock markets, he said.

Coffee prices were another large contributor, surging 10.7pc year‑on‑year in March, reflecting the pass‑through of global pricing pressures.

While headline annual inflation rose sharply in the March CPI data, the re-acceleration in inflation was not (at this point, at least) food-led, with overall food price inflation remaining similar to levels recorded since mid-2025.

Overall food price inflation was found to have remained ‘entrenched’ at slightly above 3pc, the same level it has held for ten consecutive months.

However further price inflation may be likely across several food categories in coming months, due to higher costs impacting the food supply chain from the Middle East conflict, Mr Harvey said.

“Despite moderating from earlier peaks seen in late 2022, food inflation does remain a material contributor to household cost pressures due to its large CPI weight,” he said.

In other food categories, fresh produce pricing remained mixed, with overall fruit and vegetable prices rising 1.8pc compared with March last year. Milk prices rose 4pc year‑on‑year in the March data.

Mr Harvey said geopolitical risk remains a key watchpoint when it comes to food prices in Australia. And “Australian households are not out of the woods”, with further price inflation likely across several food categories in coming months.

“The Middle East conflict is pushing up fuel and fertiliser costs at farm level. These pressures are also lifting post‑farmgate costs for food and beverage manufacturers via processing, distribution and packaging,” he said.

“Consumer resolve remains strained, with renewed pressure on discretionary spending continuing to shape food purchasing behaviour, he said.

Source: Rabo